Bike Prices & "Discounts"

[SS_Tri4Fun]

I know there are manufacturers and bike shop guys on here, but I’ll ask anyway – what is a reasonable discount (in %) to expect to get off the “list price” (ranging between US$2K and US$3K) for a good road or tri bike?

Tough to answer in the abstract, I know. But I don’t really know what is routine in the business. I’m just trying to get an idea of whether something is a good deal that I should just accept, or go for a bigger discount? I can always ask and they can always say no, but I don’t want to look piggish either, since I’d want a good relationship with the LBS for the future.

[Mike_Dick]

I get 10%.

[Jim]

since I’d want a good relationship with the LBS for the future

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Asking for a discount will not help this. It’s like you going to work and the boss saying “hey, lets pay you 10% less today then we did yesterday” Everyone likes a deal, but this is not car shopping.

[Tom_Demerly]

Interesting question.

To me, it infers that you feel you should get a discount. Why do you think that?

This is why I ask. If it becomes normal and customary for consumers to expect “discounts” to have to be in place, or that they are expected, in every bike sale then this is what happens:

Price the retailer needs to sell the bike for to make his net profit margin of 6% (an industry norm): $2500.

Customer expects to get a 10% discount off MSRP.

Therefore, the MSRP must be $2,799.99. That price allows the retailer to extend to you, as a special, highly valued, gold-key customer, a one time, “don’t tell anyone” 10% discount.

But basically, it is no discount at all. Since the consumer expects a discount, that disount is built into the MSRP and it is artificially inflated with a built-in “hold back” that gives the dealer an opportunity to either price gouge (in the case of a customer courteous and gracious enough to not ask for a discount) or to basically mis-represent the *real *selling price of the bike.

I don’t think you should ask for or get a discount unless there is a valid sale (i.e., promotional discount off the traditional, established, selling price). It is an underhanded practice on both parties part.

Think of it this way, on pay day your boss comes into your office and says, “See here, MB, you’ve been doing quite a fine job here. We’ve settled on paying you $70,000 this year for your excellent work, but I’ll tell you what we’re going to do my friend, I wondered if you’d be willing to go ahead and take $60,000 instead since we’ve given you a refrigerator in your office and a new desk. Business is business you know, so let’s do a little back-and-forth, what do you say my friend? How does $55,000 sound if I throw in a new fax machine?”

As a customer, that is what you asking a retailer. You are saying, quite literally:

“Are you willing to accept a lower standard of living so that I may take this bicycle home?”

My answer to you in that event Sir, is “No, I am not willing to accept a lower standard of living to facilitate your cycling hobby.”

[Tom_Demerly]

Oh, I should add this thought. In 1997 we did a written, anonymous survey of customers over 6 months. They would complete the survey and drop it n a box in the store. We gave them a free Coke water bottle in return.

One of the questions was something like (don’t remember the exact wording):

“Would you prefer everything to priced one price, or for items to be priced at an artifically elevated rpice and discounted from there?”

I was amazed at the answer. The overwhelming majority of people wanted items to be artifically inflated in price, then marked down, so they preceived they were getting a discount. I just don’t understand that. It builds a level of mistrust and establishes an air of shadiness around pricing.

[SS_Tri4Fun]

Tom,

Thanks for the candid feedback. I don’t really come in with an expectation of a discount, because I don’t know whether it is indeed a standard practice or not. Some retail segments it is, some it’s not. Not knowing the retail bike industry, I thought I’d ask here.

Imagine in the case of car shopping, that you didn’t know that for many many cars, you should expect to negotiate off the list price, and you instead went in and paid what the sticker said. You would have then paid much more then you really needed to.

For other products, you don’t negotiate and shouldn’t expect to. And trying to negotiate would offend the seller and cause ill will.

My only other real experience was when I bought 4 bikes at the same time (2 kids, wife and me) and the bike shop offered a discount.

So you can see why I thought it made sense to ask of those who have bought (and sold) far more bikes than I ever will. That’s all.

[SS_Tri4Fun]

“I was amazed at the answer. The overwhelming majority of people wanted items to be artifically inflated in price, then marked down, so they preceived they were getting a discount. I just don’t understand that. It builds a level of mistrust and establishes an air of shadiness around pricing.”

Tom,

By the way, I certainly I agree with you on this point. I’d rather not worry about whether I got a fair deal or not. Which is what led me to pose the question in the first place…

[stl_triness]

I’m stuggling hard with this very issue in my industry. I sell both products and services in my two stores. I sell both framed pieces of art that a consumer can buy ‘off the wall’ as well as custom framing services. In my neck of the woods competitors have gone the artificially raise the starting retail price - only to flood the market with steep ‘discount’ coupons. I’m in a dicey place as a result of this. I much prefer offering a fair price and not haggling over it. I’m shocked how much people haggle. I personally don’t pick out items in a store and then at the cash register try to bargain or insist on paying less than the amount shown. But for me it happens everyday. It makes no difference that my ‘regular’ price is often less then the other guy’s 40% off price. I will lose sales if I don’t ‘discount’.

Customers are an odd breed, something I didn’t fully appreciate until I attempted to make a living as a retailer.

[Khai]

I never ASK for a discount, but my tri LBS almost always gives me one (now that I’ve been a customer for a while), and my roadie LBS gives me occasional breaks when I’m making a major purchase. Even if I didn’t ever get a discount, I’d still shop at both places - the price break is not the reason I go to either store. It’s a nice bonus, but that’s exactly what it is - a bonus.

Having said that, a lot of places will give you 3% if you pay cash, rather than Visa/MC/Amex. I don’t consider asking for that insulting as the retailer would have to cover that percentage anyway.

[Tri-illini]

Tom,

You’ve expressed this sentiment many times and, to be honest, I don’t think it holds water. Car buying is certainly a good example, I mean when you buy a car do you just go in and pay sticker? I guess I see negotiating, or opening the conversation as an opportunity for the dealer to win my business. Just like in the job/salary s/he has the privilege of declining. I usually do my homework before I make a >1000$ purchase. I usually have different options and am not necesarily married to one product. I know the sticker price and shop around to see which price seems like the best deal. I might tell the dealer-always honestly-that I prefer his/her product but the difference in price isn’t enough for me. Would it be worthwhile for him/her to come down? I see it as giving him the opportunity to still win my business and therefore have a nice standard of living. I certainly don’t get huffy and pout if s/he feels that by waiting s/he can get his/her price. I expect the dealer to do what’s best for him/her just as I am trying to do. It’s just conversing/negotiating as is done in business every day.

Pat

[Tom_Demerly]

And it is a good question. I’ll combine my answer with some self promotion. Look at the discounts below. If you do some research on the web and in mail order catalogs and with your local LBS you can decide for yourself if these changes in price actually represent a valid “sale” or discount, or whether or not it is a false promotion with phony discounts marked down from inflated retails. It is pretty easy to tell if a sale or a discount is valid, or if it’s baloney.

[Tom_Demerly]

“I mean when you buy a car do you just go in and pay sticker?”

I bought one new car in my life, am possibly buying another next week. In each case I contacted an associate in the auto industry and said, “I need a car, can you take care of this?” They phoned back and said, “Go here and talk to Mark…” I went there with cash and paid them what they asked. I did not questions the price at all, in any capacity. They told me what to pay and I paid it without any further inquiry of any sort whatsoever. I simply paid them what they told me to.

When I bought my house I looked at two other houses on my street, figured out what I was willing to pay, and gave the owners that amount exactly. They took it. We had a long standing personal relationship and that was a factor. If they had said, “We need another $50,000 for it.” I would have said, “OK” because I wasn’t going to move.

[hammydad]

When you “simply paid what they told me to,” was this the same as the sticker on the window? It seems that you simply used a contact to do your negotiations for you. I see your point about people wanting unreasonable discounts but there are many many areas where not asking for a discount is throwing money away and quite foolish. I personally would rather pay a bit more than haggle over a relatively small amount. On the other hand, I refuse to be raked over the coals. I have worked for a small business and whenever possible I send business to small shops rather than large chains, even to the extent of paying more and driving further but if the standard is a XX% discount there, I still expect that discount. I don’t think the original poster was out of line, he just asked if there was a general anount to expect off, not how low he could absolutely go to eliminate all profit for the seller. Those people do exist though, they are called assholes.

just my useless rambling opinion.

Kevin

[Tom_Demerly]

Good point. Out of courtesy and respect to the parties involved I did not make price an issue in my car purchase or the purchase of my house.

I wanted to be n and out fast and know I had someone to take care of me if I had a problem. I treated the parties I was buying from with respect and value becasue I wanted to be treated that way in return when if I had to come back.

My primary concern was that I established myself as a strong, low-maintenance customer who didn’t create problems and was willing to pay top-dollar for top shelf service without haggling. As a result, when I go back there, they call me “Mr. Demerly”.

[Tri-illini]

Well sure, and when I bought my litespeed from my friend who owns a bike shop I didn’t negotiate price. But what would you do if you were buying from someone you didn’t know? Suppose you needed a new car, new or used, and didn’t have a friend in the industry but went to three different dealer and like three different cars for various reasons. That’s more like what buying a product might be for a lot of us.

Pat

[596]

I get people asking for discounts everyday. They work for

Disney

travel agent

police EMS or Fire

School system

Military

Local resident

You name it, they ask for it becasue they have some type of “special” job! What they don’t realize is that for every dollar…“I give you”…you are asking me to take a direct cut in pay!! The price is the price…either you pay the $$ for that room or the next person will.

That said…ALL SLOWTWITCHERS get a discount!! : ) I’m a nice guy! Just don’t ask for a discount becuase of your job!! : )

[Tom_Demerly]

Good point. We used to give Ford employees a discount since Ford World headquarters is just up the street, 8/10ths of a mile from us.

One day we rang a customer up, gave them their Ford discount. The next customer in line was a GM contract employee. They asked, quite reasonably, “Do GM contract employees get a discount…?”

On Tuesday of this week Ford will begin to extend “A” plan pricing to everyone in response to GM’s initiative to grant employee purchase to retail consumers. That is good for me, as I am likely to buy a Ford Escape as a result. However, everybody gets this price- it isn’t a “discount” per se’ anymore.

Prices rise and fall as a result of supply and demand. Right now the dealer I am going to has 123 Ford Escapes in stock and they are entering their slowest sales month of the year. It is a bit more of a buyer’s market then. I didn’t ask for a discount. They extended me the pricing and told me to wait until next week when they could make the deal happen.

The natural rise and fall of pricing (like the Felts we have on sale now) isn’t necessarily a discount, it is just supply and demand at work.

[Tri-illini]

See, when I travel I often look for the best deal in the room I stay at. Often I negotiate through priceline. If I need to be in a certain location I don’t, then I look for the best combo of price/amenities/location. I admit I would NEVER ask a B&B owner for a discount cuz I feel like I’m paying for a service, an environment that deserves a higher fee. You can certainly take that analogy to a bike shop. If I have found a shop that I feel offers premier services, as many people feel Tom’s does, then I’m so grateful for the trust that I have with them that I never discuss cost. Again with my friend and his shop I never quibble on cost, I just hand over the cc. But I don’t know that I wouldn’t negotiate cost on a bike if I was buying a bike that he didn’t carry, from someone else. And I certainly don’t hesitate to negotiate when I’m buying a car or furniture When I buy a car/furniture I’m going to war.

Pat

[stl_triness]

I’m asking this sincerely. How does one negotiate the price of furniture? When I’ve bought beds, couches, shelves, etc. I find something I like, look at the tag, and then either pay for it or keep looking for something else. Other than asking if there is a sale going on, how do you ask to pay a lesser amount than what is shown?

[Tri-illini]

First you ask the salesman if he would be willing to accept a lower standard of living. Ok, I was trying to be funny, hope no one gets too sensitive about that. No, it’s the same as with buying a car. Again, if I love a piece of furniture and feel comfortable with the price I buy. Or if the salesperson has helped me with decorating I don’t discuss cost but pay what is listed. Usually though I don’t fall in love with a piece and could be happy with several tables or chairs so ask if the price is final etc. I usually know what I want to pay and either walk away or not. I’m really not trying to insult anyone but when I do that it’s usually cuz I’m not going to buy as listed. I know several people who have bought direct from North Carolina. That’s supposed to be the cheapest way to get it but I’ve never done that.

Pat